Following through on an unfortunate campaign promise, President Donald Trump recently announced his desire for 25 percent and 10 percent tariffs on steel and aluminum imports, respectively. Such a move smacks of crony protectionism, and would unfortunately cost the U.S., and North Carolina, jobs.
One local industry that would be especially harmed is Asheville’s burgeoning craft brewers.
Statewide, the craft brewing industry supports more than 10,000 direct and indirect jobs, with more than $1 billion in economic impact. Asheville is a key driver in this growing industry.
Asheville reportedly boasts more local brewers per capita than any city in the U.S., with more than 60 commercial brewers in the greater mountain area.
Trump’s tariffs, however, would have a significant negative impact on these small businesses. Cans make up 28.5 percent of packaged production for brewers, according to the North Carolina Brewers Association, a percentage even higher for smaller craft brewers. Higher tariffs on imported steel and aluminum would mean fewer affordable options for a key input for brewers. In addition to the aluminum cans, brewers are also major consumers of steel, used for capital goods such as fermentation tanks, pipe fencing, draft equipment and kegs.
“We rely on stainless steel for brewing equipment and kegs, and we rely on aluminum for cans,” said Leah Ashburn, CEO of Highland Brewing in Asheville, in an article posted to the North Carolina Craft Brewers Guild website. “Our investments result in jobs and high-quality beer for the expanding Southeastern U.S. craft beer market. The tariffs on steel and aluminum introduce a level of uncertainty to our supply chain, our equipment needs and our future.”
In short, Trump’s tariffs would make it far more difficult for local Asheville brewers to launch or expand their business, squelching job creation.
“As Bhramari Brewing continues to explore our expansion opportunities, these proposed tariffs would certainly impact our project scope and payback periods, as well as limit us in terms of future job creation,” said Audra Gaizunas, CEO of Bhramari Brewing in Asheville, also to the NC Craft Brewers Guild.
When confronted with increasing input costs, local brewers will be forced to make adjustments to the increased production costs created by tariffs.
One option is to attempt to pass along the increased cost to the consumer in the form of higher prices. How viable an option this will be depends on how sensitive craft beer consumers are to price hikes. Many consumers will respond by purchasing less craft beer, or seeking alternatives like lower-cost and mass-produced name brand beers from out of state.
For those consumers willing to pay the higher prices, however, they will have less money to spend on other products – harming those industries. Many of those harmed industries may well be local as well, like restaurants, shops or entertainment venues.
Moreover, if Asheville’s local beer industry diminishes, the city’s vital tourism dollars may be harmed as well.
“Ten years ago our microbreweries were not a factor in motivating a visit to Asheville, but new research shows more than a quarter of visitors to Asheville stop by one of our breweries, and 14 percent say our beer scene was one of the primary reasons for their visit,” Marla Tambellini, vice president of marketing and public relations at the Asheville Convention and Visitors Bureau, told the Citizen Times last year.
Trump’s tariffs are crony protectionism. They will protect a relatively few uncompetitive companies and jobs in the steel and aluminum industries outside of North Carolina, but at great cost to other jobs and industries. One such example is Asheville’s thriving craft brew industry, which would be taxed on its vital inputs, driving up the cost of doing businesses and stunting their ability to create jobs and expand.
If Trump’s tariffs are implemented, Asheville’s flowing craft beer industry may come to a slow drip.
Brian Balfour is executive vice president of the Civitas Institute in Raleigh.
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